New Coalition Moves To Block Asbestos Bill

Washington Bureau Chief

Action on a Senate bill to create a trust fund for people withasbestos injuries was delayed last week after a new coalition ofinsurers and large defendants voiced strong opposition to thebill.

One senior industry lobbyist went so far as to declare asbestoslegislation effectively dead in this Congress after Sen. ArlenSpecter, R-Pa., chair of the Senate Judiciary Committee, confirmedearly last week that Senate Majority Leader William Frist, R-Tenn.,asked him to delay introduction of his bill. Instead, Sen. Specterplaced a 291-page discussion draft of the bill in the CongressionalRecord.

The bill calls for funding of a $140 billion trust fund to payoff asbestos claims. Under the bill, insurers would pay $46 billionover 27.5 years.

The new group calls itself the Coalition for Asbestos Reform. OnJan. 28, coalition insurance industry members, including AmericanInternational Group, The Chubb Corporation, American Re-Insurance,Swiss Reinsurance America Corporation, General Re Corporation,SAFECO and Zurich Financial Services, sent a letter to Sens. Frist,Specter, Leahy and Harry Reid, D-Nev., minority leader, voicingtheir opposition to the bill and attaching an earlier letter (datedJan. 3) signed by the other coalition members, including asbestosdefendants DuPont, Exxon Mobil and Federal Mogul Corp.

“The latest discussion draft of thelegislationraises seriousconcerns, such that we cannot support this legislation asproposed,” the coalition said in the Jan. 28 letter. “Accordingly,we believe that the time has come for the consideration of othercreative solutions to the asbestos crisis, such as federallegislation adopting meaningful medical criteria,” the lettercontinued.

Commenting on last weeks Senate action, an insurance industrylobbyist who has been involved in asbestos legislation talks forseveral years said “Asbestos legislation in this Congress is dead,”requesting that his identity not be disclosed due to companypolicy.

Explaining his prediction, the lobbyist said that creating atrust fund has been at the heart of proposed legislation for twoyears. “Medical criteria bills will be introduced in both the Houseand Senate, and the House may be able to pass such legislation.But, if you look at the Democrats in the Senate who are essentialto passage of asbestos legislation such as Sens. Chris Dodd, Conn.;Ben Nelson, Neb.; Tom Carper, Del.; Dianne Feinstein, Calif. allhave embraced the trust fund concept. There is little latitude forthem to back off now.”

“Had the trust fund concept not been circulated and gainedtraction, there was a 30-to-40 percent chance of getting medicalcriteria legislation passed in the Senate this Congress,” hesaid.

Another industry lobbyist who asked not to be named out ofconcern that his comments could damage his dealings with theJudiciary Committee said the coalition's main objective was to killthe trust fund provision in the bill. “Sen. Specter has hitched hiswagon to a falling star,” he said.

At the same time, another industry lobbyist with long-termexperience on the issue urged support for Senator Specter as heworks his way through the issues.

“I am aware of this new coalition effort,” said Maria Berthoud,a principal and vice president at B&D Sagamore in Washington.“There are many companies who think that the trust fund approachwill not work, nor gain the necessary political support to passboth chambers of Congress.”

“However, I believe Sen. Specter has been a strong leader forthe interested parties for a long time and that he deserves oursupport as he continues to try and find a middle-ground solution tothe very important asbestos issue.”

Ms. Berthoud concluded that “if the affected parties havedecided that a trust fund will not work, I guess we have to let thelegislative process work itself out.”

In comments to reporters, Sen. Frist said he wanted to givemembers more time to review the bill before it is formallyintroduced. Sen. Frist added that allowing Sen. Specter tocirculate his discussion draft more widely will allow rank-and-filemembers to review the legislation.

But another industry official agreed that opposition to theproposal from the new coalition, and Sen. Specter's insistence on abroad compromise that includes a trust fund paid into by insurers,increases the likelihood that the bill is dead in its present formdespite Sen. Specter's insistence that his bill be the basis ofcommittee action.

“Forging a compromise with Sen. Patrick Leahy, D-Vermont,ranking minority member of the committee, that got farther andfarther away from what the industry would accept is what doomed thebill,” the source said.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, February 11, 2005.Copyright 2005 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.